Microsoft`s Smarter Retailing Initiative Embraced By Leading Companies in the Food Retailing and Supermarket Industries

Number of Partners Supporting Initiative Continues to Grow; A&P; and Smart & Final Deploy Microsoft-Based Real-Time Retailing Solutions Enabling Smarter Operations And Smarter Selling

SAN FRANCISCO, March 1 -- Today at the Food Marketing Institute`s MARKETECHNICS 2004 show, Microsoft Corp. (NASDAQ:MSFT) announced that its Smarter Retailing Initiative, a comprehensive solutions framework for enabling the next generation of retail innovation, is being embraced by leading companies in the food retailing and supermarket industries. Microsoft also announced that both A&P; and Smart & Final have deployed Microsoft-based, real-time retailing solutions to improve the flow of information and respond more quickly to changing business conditions.

The Smarter Retailing Initiative was launched in January 2004 with the support of more than 20 companies committed to delivering solutions and services that align with the Smarter Retailing vision and using the Microsoft(R) .NET Framework, the programming model for building XML Web services and applications.

The momentum generated by the launch is now extending into the supermarket, convenience store and drug industries. AccessVia, Eatec Corp., OPENFIELD Solutions, Retalix Ltd., Sweda Corp. and Wincor Nixdorf Inc. have joined Accenture, Fujitsu Transaction Solutions Inc., HP, JDA Software Group Inc., Manhattan Associates Inc., NCR Corp. and Trax Retail Solutions Inc. in supplying solutions that enable retailers to take full advantage of their legacy investments, while reducing the challenges and risks associated with deploying and integrating future technologies to adapt to changes in the market. A&P; and Smart & Final are deploying Microsoft technology-based solutions that address real-time retailing.

"Grocers, wholesalers and others in the food industry are facing some tough challenges right now: the economy, competition from a multitude of channels, lowered profits due to shrink, and the looming need to upgrade dated, proprietary systems," said Brian Scott, general manager for the Retail & Hospitality Industry Solutions Group at Microsoft. "It is very exciting to see how our vision for Smarter Retailing is manifesting itself with key retailers, such as A&P; and Smart & Final, and in solutions being delivered by our strong ecosystem of retail industry partners."

A&P; Deploys GAPcom Store Portal
A&P;, one of the nation`s first supermarket chains and among the largest in North America, has rolled out the next phase of its communications and collaboration system based on Microsoft technology. Initially launched in 2002, the GAPcom Store Portal provides A&P; with the ability to electronically publish and instantly update merchandising bulletins, pricing, store signage, operations manuals, and other store updates and applications that previously were disseminated on paper. GAPcom also opens the path for two-way communications between headquarters and the stores, enabling faster responsiveness to customer demands and other business opportunities. GAPcom is based on Microsoft Exchange Server, Microsoft Office SharePoint(TM) Portal Server 2003 and Microsoft Active Directory(R).

Smart & Final Deploys Point-of-Sale (POS) Data Repository
Smart & Final, an operator of nonmembership warehouse stores for food, supplies and culinary equipment, is deploying the next phase of its point-of-sale (POS) data repository. This real-time retailing solution is highly automated and delivers data anytime, anywhere. It was designed to improve processes, deliver value and, most of all, make it easier for customers and vendors to do business with Smart & Final. The POS data repository is based on Microsoft Windows Server(TM) 2003, Microsoft SQL Server(TM) and Microsoft Windows(R) XP Embedded.

Industry Standards Are a Priority
Based on open industry standards such as Web services and Extensible Markup Language (XML), and retail-specific standards such as the Association of Retail Technology Standards (ARTS) IX Retail, OPOS, Radio Frequency Identification (RFID), UCCnet and Microsoft`s Smarter Retailing solutions framework, these deployments will serve as the foundation for information technology projects in the future. Microsoft also recently ramped up its commitment to food retailers by becoming a member of CIES, The Food Business Forum, the independent global food business network that is addressing the highly complex and sensitive area of traceability.

Addressing the Looming Need to Upgrade
One of the challenges facing food retailers is that their current, proprietary systems are nearing the end of their life. "The availability of newer technologies, such as RFID, and the proliferation of wireless handheld devices are something retailers should seriously consider when mapping out their strategy for upgrading and replacing their current POS systems," said Jeff Roster, principal analyst for Global Industries -- Retail at Gartner Inc. "Research indicates that over the next two to three years, many of the currently installed POS systems will be nearing their end of life, so now is the time to be thinking about expanding the vision of the store`s IT infrastructure in order to be in a position to take advantage of these technologies."

Rather than urging users to rip and replace, Microsoft and its partners are developing a variety of solutions to ease the migration to upgraded systems. For example, HP has expanded its portfolio of strategic offerings for the retail industry with the introduction of DeviceConnect-485, a comprehensive, new PCI card that enables retailers with legacy POS hardware (e.g., IBM 4683, 4684, 4693, 4694) to migrate to open, industry-standard POS systems based on HP`s rp5000 POS platform and Microsoft`s Smarter Retailing Initiative. The DeviceConnect-485 allows retailers to protect existing investments and devices running on legacy IBM systems, including scanners, receipt printers, scales, cash drawers and 2x20 displays, and connect them directly to the HP rp5000 open-standards platform.

Wincor Nixdorf is launching Out of the Blue, an initiative designed to educate retailers and offer solutions and services for the implementation of 4690 migration strategies. Out of the Blue enables retailers to take advantage of low-cost hardware and leverage the enterprise capabilities of modern operating platforms. Wincor`s Retail Migration Platform includes a middleware layer that allows retailers to run 4690 applications on Windows XP Embedded without modifying the underlying source code. Existing applications can be extended with new capabilities including graphical user interfaces, Web technologies for browser support or e-mail, and a touch screen user interface.